Here’s a roundup of some of the top supply chain predictions for the year ahead.
If ever there was a time that supply chain managers needed a crystal ball, this would definitely be it. After enduring 20+ months of pandemic-driven disruptions ranging from supply chain shortages to labor constraints to transportation capacity shortages, all supply chain, procurement, logistics and transportation professionals would love to know what lies ahead in 2022.
While we can’t supply a crystal ball, we can round up some of the most popular predictions that are already circulating in the industry and share them with you. Here are five that you’ll want to keep an eye on as we move into the New Year:
- The talent shortage will continue. The national labor market was tight going into 2020 and then the pandemic accelerated it as shutdowns, quarantines and stimulus checks pushed workers to rethink their career paths. Overhaul’s Barry Conlon expects the shortage to sustain itself in 2022, and it’s not just limited to truck drivers either. “Everyone is learning how to do more with less through the current driver shortage, which will continue to delay companies looking to expand their fleet or increase capacity,” Conlon writes in Inbound Logistics. “With competition for talent so fierce right now, do everything in your power to do right by your people: If you own a fleet, make sure your drivers are feeling loved; if you're a broker, make sure you're treating partners with respect.”
- Capacity will stay constrained. Right now there’s too much demand and not enough capacity—a situation exacerbated by the growth in shipping volumes due to COVID-19. “Rental prices per ship can be blown out to $200,000 a day, and some brands are paying a premium to move product by air—in 2020, Apple chartered 200 private jets to ship devices, a new company record,” Conlon writes. “It’s going to take time for capacity to catch up to demand, and companies will need to make the most of the capacity they have by keeping a close eye on asset utilization and prioritizing shipments.”
- Advanced planning will continue to pay off. As we all learned in 2021, waiting until the last minute for just about anything can thwart even the best-laid plans. To ensure reliable sources of supply, on-time deliveries and adequate capacity, companies should be thinking well in advance about their transportation needs. “For 2022, it’s a promising idea to start thinking about scaling up your inventory,” Red Stag Fulfillment’s Jake Rheude writes in GlobalTrade. “We’ve seen slower inbound services and prolonged delays at ports. So, increasing stock on hand helps you avoid stockouts and backorders. Work to secure or build that additional space early on to accommodate this increase in stock. It’ll protect order fulfillment as well as give your overall supply chain more lead time.”
- Supply chain strains could begin to ease. There appears to be a glimmer of hope surrounding supply chain disruptions right now, but the emergence of the new COVID variant and the current peak season may ultimately dictate where relief comes in early-2022 (or not). “Companies that have been scrambling to get goods into stores and distribution centers by the end-of-year holidays are now starting to take a longer view on when the gridlock that has tied up their supply chains might finally end,” logistics reporter Lydia O’Neal writes in WSJ. Even with some bright spots beginning to appear, O’Neal says that the interconnected nature of supply chains equates to no “quick fix” to resume the steady flow of goods through the global economy. “Comments from corporate executives on recent quarterly earnings calls and interviews with logistics experts suggest expectations for relief increasingly are being pushed deep into 2022 and even beyond.”
- Companies will continue reassessing and retooling their supply chains. The supply chain has never been a “set it and forget it” business function. Knowing this, SCMDOJO reports that 2022 will be a year of pivoting for companies seeking more reliable means of procurement, which subsequently feeds their healthy supply chains. Those that ignore this imperative do so at their own peril in an environment where all of the spotlights seem to be pointed at the global supply chain. SCMDOJO says some of the shifts already taking place include reshoring of manufacturing operations, diversification of supplier basis and new carrier agreements. “Leaders need to be decisive in recognizing the need for change,” the publication adds, “and be willing to break down and rebuild partnerships that no longer serve as reliable.”
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